Naspers's (JSE: NPN; LSE: NPSN) Classifieds business, OLX Group, announced today an investment of US$1.16 billion, at an implied enterprise value of $3.85 billion, to acquire a further 29.1% stake in Avito, the leading online general classifieds and property platform in Russia. OLX Group's stake increases from 70.4% to 99.6% on a fully diluted basis. The remaining shares are held by existing management.
Bob van Dijk, Naspers CEO said: "Avito is the leading online classifieds player in Russia and our decision to increase our stake reflects our belief in the long-term prospects of this great business and the Russian internet market. This investment further strengthens our global position in online classifieds, a core focus for Naspers alongside online food delivery and fintech."
Naspers initially invested in Avito in 2013. Over the last five years Avito has established leading positions in five key categories: Goods, Autos, Real Estate, Jobs and Services. With 10.3 million daily unique visitors, Avito now attracts a large portion of the Russian internet population every day.
Avito continues to experience strong growth. In 1H 2019 revenues increased by 31% to US$162m, driven by enhanced product features, strong vertical traction and working closely with professional advertisers. The business continues to generate robust profit margins.
"Avito's talented management team, led by CEO Vladimir Pravdivy, has demonstrated the capacity to achieve remarkable growth consistently over time," said Martin Scheepbouwer, CEO of the OLX Group. "Business performance is excellent and we look forward to continuing this trend by further leveraging the technology, knowledge and experience from Avito within OLX Group and vice versa."
The transaction closed on January 25, 2019 and was funded by Naspers' existing cash resources.